“Carve-outs”: White House open to granting Canada, Mexico exemptions from new tariffs?

Allahpundit Posted at 5:31 pm on March 07, 2018

The key words here are “national security.” Steve Mnuchin said yesterday that Canada and Mexico might be granted exemptions from the steel and aluminum tariffs — but only if they bow to U.S. demands in renegotiating NAFTA. That seems unlikely, which meant a trade war on our northern and southern borders was full speed ahead.

But watch Sanders. She doesn’t mention a new NAFTA as a reason to exempt the two countries. She mentions “national security,” i.e. not wanting a trade dispute to alienate important allies. That’s different.

Or maybe she’s just ad libbing? Trump stunned his administration last week when he announced the tariffs after his advisors had been led to believe he was holding off (for now). His lawyers hadn’t prepared anything and department heads like Mattis hadn’t conferred with allies to prepare them. No doubt Trump is being lobbied intensely even now to change his mind or soften the proposal somehow. Imagine being Sarah Sanders in the middle of that chaos and uncertainty having to explain what might happen with Canada and Mexico. Literally anything might happen. So what do you say when a reporter asks? You … say something noncommittal, knowing that the big guy might have changed his mind before the briefing’s over.

Speaking with Prime Minister Justin Trudeau on Monday evening, Trump signaled he was flexible in how the proposed tariffs would apply to Canada, a person close to the trade talks said. During a conversation with British Prime Minister Theresa May on Sunday, Trump indicated he had not made a final decision on what to do with steel and aluminum tariffs, according to person familiar with the call…

Officials say Trump has listened carefully to the criticism of his announcement and concede it’s likely that the final plan won’t apply the same tariffs to every country.

He’s getting heat from both the left and the right too. Ted Cruz, this morning: “I think tariffs on steel and aluminum are a mistake. I think there are a lot more jobs in this country that are dependent on steel and aluminum as inputs, and we are going to end up costing more jobs because of the tariffs than will be saved, and that doesn’t even factor into account the retaliatory tariffs that we may see Europe and China and other trading partners do, which could hurt farmers, manufacturers.” Chuck Schumer, this afternoon:

“The president’s instincts to go after China are correct, but the policy he proposes doesn’t fit the bill. It’s not well targeted. It’s not precise. And as a result, it could cause a mess of collateral damage that hurts America more than it helps,” Schumer said on Wednesday…

“He has to back off this plan, which doesn’t do what it’s supposed to do. Major harm is done to allies like Canada and Europe, not to China. … A trade war is not what we want,” he said.

How often are Cruz and Schumer singing from the same hymnal?

If in fact Trump ends up carving out Canada and Mexico (and the EU?) from the new tariffs under an “allies” exemption, there’s no mystery whom we’ll have to thank. That’d be James Mattis and Rex Tillerson, both of whom have been lobbying Trump and Wilbur Ross over the past week to rethink. Their reasoning is the same one given by Sanders here — national security, the fear of unintended consequences as good relations between the U.S. and its allies turn bitter and things like information-sharing between intelligence bureaus and American military deployments in key regions become more politically fraught. We’ll see who has more influence in the end, Ross and Peter Navarro or POTUS’s top two foreign policy guys.